White-collar crime can be defined as the unlawful acquisition of money by failing to adhere to the set rules and regulations in terms of fraud and stealing money meant for a private entity or public organization. The nature of this kind of crime does not involve violence or force but it relies on the brains of the intellectuals involved.
Enron was a very successful organization that dealt with energy generation. This success did not last long because its members of the administration including its president were involved in squandering money from the organization and depositing that money into their private bank accounts. This crime was coupled with mismanagement of money which was well organized because it was done in cooperation with junior and senior employees of the Enron Company. Perhaps the culprits in the above mentioned thought they could steal money without being caught (Friedrichs, 2003).
They might have been influenced by the chief executive officer because he may have deceived them that he would cushion them from being prosecuted. Their malpractices were brought into the limelight by Arthur Andersen auditing firm in 2001. There are persons in Enron who tried to hinder investigations by damaging vital hard copies. Others had entered wrong details into taxation forms willingly intending to cover up their tracks and again manipulating stock values Enron is just an example of how white-collar crime can ruin an organization.
The performance of the Arthur Andersen audit firm is quite commendable because it takes determination and courage to expose scandals of this nature. There are auditors in the past who are manipulated using handouts by company administrators not to reveal their activities.
The effects of white-collar crimes on society are more fatal than those caused by armed robbers and burglars. For instance, commodities that are meant for human consumption should be vetted to ensure they are safe for human use and if they don’t meet international standards such commodities should be disposed of and destroyed.
If the people in charge of vetting consumer products allowed such items to be sold to citizens there would be more casualties than ever before due to the magnitude of people who need such items. Investigations have shown that such substandard items are allowed to circulate in the market by bribing the vetting officials.
Friedrichs (2003) insists that public officers and personnel of private corporations should not give their monetary gains the priority at the cost of other citizens. Maybe what motivates people to engage in such practices is the intensity of punishment imposed on fraudsters which are considered lenient.
Most people argue that the criminal justice system favors seasoned offenders compared to minor offenders such as muggers and shoplifters who are accorded long prison sentences than their counterparts. This leniency is seen to be unfair by many because one would expect the judge’s verdict to be based on the intensity of effects caused by a given violation of law and the material worth of the loss caused to the victim.
Most organizations and individuals are driven towards committing these crimes by their strong desires to save money that constitutes their proceeds. Some argue that doing things in the right way is expensive and that’s why they are forced to go for the cheapest option which is unlawful.
For instance an organization that deals with importation and sale of automobiles might opt to avoid taxes to the government to fully maximize the possible profits. This is because taxes on imported items are high hence the organization in this case will identify the best strategy to import vehicles without paying import duty or only paying very little amount. In such a case the importers enter into an illegal agreement with clearing and forwarding officials to tamper with importation documents so that they subsidize taxation. The officials here benefit from the bribes offered while the importer saves his money.
On the other hand, the government incurs huge losses hence lacks the revenue to facilitate its operations which in return leads to a decline in the economy. White-collar crime can also be done by giving false information to the public in order to boost sales. Enron is a good example because the management manipulated stock values with the aim of improving the company’s image. Some organizations are known for advertising vacant positions after they have literary sold those vacancies for material gain. This means that the hiring of employees is not based on merit but the financial stability of the job seeker. It will take a matter of months for the effects of hiring incompetent employees to be felt.
There are corporate entities who outsmart each other by reducing their commodity prices drastically to eject their competitors out of the market hence increasing their market share and thus incurring high-profit margins. Monetary gain is the major element that mostly influences people to engage in dubious deals.
The best way of limiting the chances of white-collar crime is to involve society in monitoring the activities of organizations hence they act as the watchdog of the public interests. Organizations and private entities should identify ways of reflecting the success of an organization in the lives of its employees. This can be done through salary increments because most employees are tempted to steal when they realize that their continued to overstay in their present organizations will not bear any fruits because they don’t benefit from the success of their respective companies.
Terry (2007) explains that these benefits will instill discipline in employees and make them feel like they own the company hence they will defend its interests. When employees realize that they are not beneficiaries of the company’s success story, they plot to part with some money as they look forward to securing employment else wherein organizations that have a history of honoring their employees.
Private entities should consider hiring their closest relatives to administer over their enterprises because they represent the best interests of the company. This is simply because they know they can never cease to be members of that family unless they cease to exist.
Heavy punishments should be imposed on people who engage in white-collar crimes to discourage the would-be offenders. Organizations and private entities should employ the habit of consulting auditors to vet financial records. This is because financial auditors have the necessary expertise in detecting white-collar crime.
Most people don’t know how to respond to white-collar crimes that involve their seniors. There is no need of reporting crime committed by one’s senior to the management of the same company because they could be doing it as a team. The best response would be to report such cases to anti-fraud agencies because they are independent.
Stuart (2006) advises that it is important to exercise caution when working with employees who can use financial records frequently because they are the ones who are most likely to engage in this vice. This involves interrogating them about their private businesses by making them account for their other sources of income.
Some governments make it mandatory for their employees to declare their wealth. These findings can later be analyzed to verify that their sources of income are legitimate. Sudden change in lifestyle without proper cause such as career advancement suggests that the money acquired by the person in question is not legitimate.
The Enron case elicits some flaws in the procedures of detecting white-collar crimes. The events were not discovered because the criminal justice system was biased and did not have enough evidence to predict the happenings. Therefore, the criminal justice system should consider taking each crime with greater concern because treating perpetrators of law about their statuses and wealth cannot combat crimes. Undercover investigators can be very helpful because they can trace the activities of employees without being recognized.
References
Freidrichs, D.O. (2003). Trusted Criminals: White Collar Crime in contemporary society. London: Wadsworth.
Stuart, G.P. (2006). Lying, Cheating, and Stealing: A Moral Theory of White Collar Crime. Oxford: Oxford University Press.
Terry, L.L. (2007). Dishonest Dollars: The Dynamics of White Collar Crime. Ithaca: Cornell University Press.